My big boy pants weed play, Cannabis Royalties, which has been looming on the public markets like a freight train this last month, put out news today about how the California and Florida weed vote will impact their business going forward.
As expected, both states gave the nod to recreational marijuana, with two more (Massachusetts and Nevada) jumping aboard. Maine’s vote remains too close to call. Four other states voted on the medicinal weed question.
For Cannabis Royalties (soon to be CannaRoyalty Corp), their business plan has been to collect cannabis assets across a variety of products and services, and to then take those brands and technologies into other states as they’re regulated, thereby creating national brands.
The company revealed today it has assets in California and Florida that will benefit from the referendum results.
Cannabis Royalties’ platform of holdings include royalty agreements, convertible debt and equity interests encompassing research, brands and devices, as well as other strategic investments.
In California, CRHC has a total of eight holdings across these key verticals. This includes an interest in BAS Research, a medical cannabis manufacturing and research group, which develops advanced, science-driven medical cannabis products. Based in Berkeley, California, BAS Research was recently featured on the leading syndicated medical television series, the Dr. Oz Show.
In Florida, CRHC indirectly holds an equity interest in Alternative Medical Enterprises, LLC, a company focused on the development, production and dispensing of medical cannabis; in addition to a royalty agreement on a suite of cannabis products. CRHC also has business interests in Washington, Oregon, and Arizona with a growing pipeline of opportunities in other US states and in Canada.
As for how it’s coming to market:
An application has been made to list CRHC’s business on the Canadian Securities Exchange (“CSE”) under the name “CannaRoyalty Corp.” As previously announced, CRHC has entered into an agreement (the “Agreement”) dated June 30, 2016 with Bonanza Blue Corp. (“BB”), an unlisted reporting issuer in the Province of Ontario, that contemplates the completion of a business combination between CRHC and BB by way of a three-cornered amalgamation that will result in the reverse take-over of BB by CRHC’s shareholders (the “RTO”). The RTO will result in CRHC merging with a wholly-owned subsidiary of BB and continuing as a wholly-owned subsidiary of BB, and in connection with the RTO, BB is expected to be renamed “CannaRoyalty Corp.” Completion of the RTO is subject to, among other things, receipt of requisite CRHC shareholder approvals, regulatory approval, including approval of the CSE, and additional conditions, as described in the Agreement.
CannaRoyalty Corp raised $5 million in August at $2 per share, so don’t expect this to come out at $0.12. I’ve heard $2.50 as being the likely public listing price, though that may have changed in the time since as the sector has gone bonkers.
Their website has been updated recently, which is worth a look, but those looking for details on their assets will have to wait a while longer. There is, however, a picture on a CannaRoyalty Twitter account, linking to a CannaRoyalty Instagram account, that is intriguing.
I have not been engaged by CannaRoyalty as a marketing consultant, and they’re not a sponsor of the site, but I firmly believe, if I were CEO of a weed company, I’d be taking exactly the path they’re taking. This is a play that works directly into my estimation that, in six months to a year, we’ll be seeing our first Big Pharma or Big Health acquisitions of companies in the weed space, and it will be companies that have built nationally recognizable brands that will get the biggest wins at that time.
— Chris Parry